A woman who was billed $303,709 for surgery that she was expecting to pay $1,337 for back in 2014 has taken a significant step towards having that debt wiped after the Colorado Supreme Court ruled in her favor.
According to the Denver Post, St. Anthony North Health Campus hospital had represented to French that a pair of back surgeries she needed would cost her $1,337 out of pocket, with her health insurer picking up the remainder of the bill.
However, according to the report, a hospital employee misread French’s insurance card, with their estimate for the bill based on the proviso that her insurance provider was “in-network” with the hospital. This was incorrect.
The term “in network” refers to hospitals and health care facilities that are part of a health insurance firm’s network of providers, who offer care at a negotiated discount rate. Patients tend to pay less under a contract that requires the healthcare provider to accept the insurer’s payment as payment in full.
In the event a patient’s insurance is not in-network, then they can often be left with a bill for the balance not covered by the insurer. This bill essentially amounts to the difference between the healthcare provider’s full charge and their insurance company’s approved amount of cover.
Situations of this kind have led many to call for the introduction of a single national government program for health insurance coverage. In 2020, a survey from the Pew Research Center found that 36 percent of Americans were in favor of a single program compared with 30 percent a year earlier, while 26 percent called for a mix of private and government programs.
In the case of French, the Post said that she was required to pay the hospital’s “chargemaster” price rates, a selection of the hospital’s sticker prices for various procedures, which were never revealed to her.
That left French facing a hospital bill of $303,709. Though her insurance company covered $74,000 of the bill, she was still left facing a remaining balance of $228,000. She decided to take legal action, claiming the additional chargemaster costs had not been disclosed before she signed the contracts for her surgery.
A trial court judge subsequently sided with her, having determined that the contracts she signed were ambiguous with a jury determining she should pay just $767 in additional costs.
However, the Colorado Court of Appeals found in the hospital’s favor, with their ruling noting that it is difficult for healthcare providers to accurately determine a fixed price as it is not always clear how much care a patient will need.
They also determined that the contract’s wording of “all charges” was “sufficiently definite” to include the chargemaster costs as, according to the news outlet, they were pre-set and fixed.
That ruling was overturned by the Colorado Supreme Court on Monday, who instead reverted back to the original trial court ruling.
They unanimously found the contracts did not obligate French to pay the chargemaster rates as they had never been disclosed to French and she did not know of their existence when she signed up for her surgeries.
Lawyers for the hospital’s operators, Centura Health, had argued the contract’s wording that she would pay “all charges of the hospital” made it implicit that this included the chargemaster rates.
However, this was rejected by the Supreme Court. According to the Denver Post, Justice Richard Gabriel wrote in the court’s opinion that French, “assuredly could not assent to terms about which she had no knowledge and which were never disclosed to her.”
He also criticized the charging system, writing: “Hospital chargemasters have become increasingly arbitrary and, over time, have lost any direct connection to hospitals’ actual costs, reflecting, instead, inflated rates set to produce a targeted amount of profit for the hospitals after factoring in discounts negotiated with private and governmental insurers.”
Speaking after the ruling, French’s lawyer Ted Lavender confirmed that this should be “the end of the line” for his client’s case. He told the Post, “I have spoken with her today and she is very happy with the result.”
Since French’s surgery in 2014, Colorado has passed a law requiring hospitals to make many self-pay prices public. Since 2019, hospitals have also been required to make chargemaster prices public.
Newsweek has reached out to Centura Health for comment.